Higher education is an important factor in the success of our
commonwealth. Expanding access to affordable high quality postsecondary
education can provide more of our young people with the opportunity to
choose their paths in life without being blocked by insurmountable
financial obstacles. In the long run, that strengthens our overall
state economy. Adequate state funding helps ensure that these benefits
are broadly available to all who want to pursue higher education.
Insufficient state funding, on the other hand, leaves students and
their families with higher tuition and debt, and thus threatens to put
higher education—and the opportunities it
offers—beyond the reach of those who cannot afford it.

More than half of our state’s public high school
graduates
who attend college enroll in a public college or university in
Massachusetts. Students attending public postsecondary institutions are
significantly more likely than those attending private ones to live and
work in Massachusetts after graduation, contributing to our communities
and our economy over the long term.

Organized as a series of charts, this paper details major trends since
Fiscal Year (FY) 2001 in state support for our public colleges and
universities, and how those changes have led to sharply increasing
costs for students and families, which they pay for with increasing
amounts of debt. On several measures we compare Massachusetts to other
states.

We show that:

A well-educated workforce
plays a crucial role in the economic strength of our state.
Massachusetts has the best
educated workforce in the country and the
highest median hourly
wage.

Deep cuts in state support for
public higher education have contributed to some of the highest tuition
and fees increases in the nation from 2001 to 2016.

Along with large cuts in state
scholarship funding, these tuition and fee hikes have doubled the share
of postsecondary education costs borne by students and their families,
from about 30 percent to around 60 percent.

Students and families have
paid these costs by borrowing more. Among students graduating from
public 4-year postsecondary schools,
average debt grew faster in
Massachusetts than in all but one other state from 2004
(the earliest
year for which data are available for most states) to 2016.

Average debt
among state
university and UMass graduates now almost equals the average debt among
graduates of the state’s private colleges and universities.

All dollar
amounts and percentage changes are adjusted for inflation
unless otherwise noted.

Higher
Education is Vital to Our
State’s Economic Strength

1)
States with more
college-educated workers have stronger, higher-wage
economies.

States with a greater share of college-educated workers tend to have
stronger, higher-wage economies, as shown in the graph below. States
whose workforces have the highest levels of educational attainment tend
to have median hourly wages over $20, whereas states whose workforces
have the lowest levels of educational attainment have wages between $15
and $16 an hour. A few states with small populations, like Alaska, buck
this trend, but it is remarkable how tightly clustered the rest of the
states are around the upward trend line.

The importance of increasing the share of a state’s
workforce
with at least a bachelor’s degree is a relatively new
phenomenon. Back in 1979, there was little clear relationship between
postsecondary educational attainment and wages at the state level.
Today, however, it’s very hard to get a job that pays
family-sustaining wages with only a high school diploma. For more
detail on these trends and an analysis of their causes, see
MassBudget’s “A
Well-Educated Workforce is Key to
State Prosperity.”

2) It isn’t only a
bachelor’s degree that boosts
earnings.

While the graph above focuses on the connection between higher wages
and the share of a workforce with a bachelor’s degree or
higher, other postsecondary credentials—such as two-year
associate’s degrees and certificates—also tend to
lead to higher wages. Massachusetts workers with two-year
associate’s degrees, for instance, earn roughly $12,000 more
per year than those with just a high school diploma.1

And educational certificates have been found to
increase the
earnings
of workers without a college degree by several thousand
dollars
annually. In 2015-16 Massachusetts community colleges awarded over
3,100 certificates requiring less than two years of
study—nearly half of them in programs leading to work in the
health professions. This is up nearly 50 percent over the roughly 2,100
less-than-two-year certificates awarded by the state’s
community colleges in the 2000-2001 academic year.2

3)
Graduates of public
institutions are more likely to stay in
Massachusetts after graduation

More than half of our
state’s public high school
graduates
who go on to college attend a public higher education campus in
Massachusetts within 16 months of finishing high school. For the high
school class of 2015, 26 percent went on to a Massachusetts community
college, 12 percent went to a state university, and 15 percent went to
a UMass campus. For more detail and for prior years, see
“High
School Graduates Attending College or
University” at the Kids Count Data Center.

Further, graduates of our public campuses are more likely to live and
work in Massachusetts after graduation, contributing to our communities
and our economy over the longer term. Specifically, according to the
most comprehensive longitudinal study tracking the paths of American
college students post-graduation, 60 percent of graduates of
Massachusetts public colleges in 2008 were working in Massachusetts
four years later. Only 38 percent of private graduates in 2008 remained
in-state in 2012 (see graph below).

Massachusetts has cut spending
on public higher education by
14 percent
since FY 2001, as shown in the graph below. State funding cuts were
largely caused by budgetary pressure felt by all state programs since
the early 2000s. Between 1998 and 2002, the state phased in a series of
cuts to the state income tax, which has led to a loss of over $3
billion annually (for more detail, read Income
Tax Cuts and the Budget
Deficit in Massachusetts). As a result, many state programs
have been
cut over the past 17 years, including local aid, early education,
public health, and public higher education.

5)
Higher education spending per
student has been cut even
more—by 32 percent.

Even as total state funding
declined, enrollment increased,
meaning
that per student funding decreased by even more. Adjusting state
spending by the number of resident students enrolled in each of our
campuses, as detailed in the graph below, shows a cut of 32 percent
since FY 2001 (compared with 14 percent when just looking at total
funding)

Amid
Drops in State Support,
Sharp Increases in Tuition and Fees

6)
State funding cuts played a major role in driving tuition &
fee increases across all of our campuses.

State funding cuts have contributed to
sharp increases in tuition and
fees, as shown in the graph below. As campuses received less operating
support from the state, they increased tuition and fees as one strategy
for raising sufficient revenue. Combining all public institutions
together, the state cut funding by
about
$3,000 per student since FY
2001 and tuition and fees have increased by about $4,600 per student.
These numbers suggest that state funding cuts were responsible for a
large share of tuition and fee increases.

7)
Cuts played a major role in
driving tuition & fee increases
of $2,800 per student at community colleges.

Across our 15 community colleges, state
funding is down $2,100 per
student since FY 2001 while tuition and fees are up $2,800 per student.

8)
Cuts played a major role in
driving tuition & fee increases
of $5,400 per student at state universities.

At our nine state universities, state
support is down $2,500 per
student and tuition and fees are up $5,400 per student.

9)
Cuts played a major role in
driving tuition & fee increases
of $5,600 per student at UMass campuses.

And across our four undergraduate UMass
campuses, state support is down
$5,100 per student, with tuition and fees up by $5,600 per student.

10)
Tuition and fees at MA
public universities have grown 109 percent
since 2001—after adjusting for inflation.

Average tuition and fees at public
four-year institutions in
Massachusetts more than doubled from 2000-2001 to 2015-2016 after
adjusting for inflation—a rate of increase exceeding
two-thirds of all states.

Funding
Cuts and Tuition
& Fee Hikes: Students and Families
Take on More Debt

11)
Massachusetts has cut state scholarship funding by 32 percent since
2001.

Most of the roughly $1 billion we
spend annually on public higher
education goes directly to the different community college, state
university, and UMass campuses to help support their general operating
budgets, but the state also supports scholarship programs for targeted
student populations. Overall, we have cut these state scholarships by
32 percent since FY 2001, as shown in the graph below. (While the trend
is similar, it’s purely a coincidence that per student
funding and scholarship funding were both cut by 32 percent over this
timeframe).

The largest portion of state
scholarship funding goes to the
need-based
MASSGrant
program for low-income college students. According to a
report
of the Higher Education Finance Commission in 2014, MASSGrant
funding covers a much lower share of student costs than it once did: in
1988 MASSGrant covered 80 percent of a qualifying student’s
tuition and fees, whereas it only covered nine percent in 2013. Reduced
MASSGrant funding has been partially offset by increased campus-based
scholarships (or “institutional aid”), which are
funded in part by higher tuition and fees paid by all students.

This trend of reduced state support
leading to increased tuition and
fees means that students themselves now pay for a larger portion of the
college costs. As shown in the graph below, back in FY 2001 students
and their families paid for less than one-third of higher education
costs, whereas now they pay over half. For a four-year degree at the
state universities and UMass, students’ share of costs has
nearly doubled.

13)
The share of graduates
taking out loans has increased, as has their
total level of debt.

More and more students are taking out
loans to help finance a public
university education in Massachusetts, and the amounts they borrow are
growing each year. The share of graduates of public universities in
Massachusetts who have student loans increased from 58 percent in the
2003-4 academic year to 73 percent in 2015-16. Among borrowers, average
student loan debt increased 77 percent, after accounting for inflation.

14)
Per capita debt (including
those students without loans) is up 122
percent.

Considering these two trends together,
we find that across all
Massachusetts public university students (including those who graduate
without debt), the average graduate finished their degree with over
$22,000 in outstanding student loans. That’s an increase of
122 percent from 2004 to 2016, after adjusting for inflation.

15)
Massachusetts public
university students used to graduate with some
of the lowest student loan debt in the country.

Not long ago, Massachusetts could brag
of graduating students from its
public 4-year postsecondary institutions with some of the lowest debt
in the country—an average of just over $17,000 (adjusted for
inflation to 2016 dollars).

16)
Massachusetts public
university students now graduate with the 10th
highest student loan debt in the country.

Now, students are graduating from our
state universities and UMass with
the 10th-highest debt in the country—an average of just over
$30,000.

17)
Average debt of graduates
from public universities in Massachusetts
has grown faster than in all but one other state.

In going from graduating its public
university students with some of
the lowest student loan debt burdens to saddling them with the
10th-highest, Massachusetts saw the average debt of its university
graduates grow faster from 2004 to 2016 than in all but one other state.

18)
Public university graduates'
debt now almost equals that of private
college and university graduates in Massachusetts.

As we have seen, the chain reaction of
funding cuts and tuition and fee
hikes have led to large increases in the overall student debt burden
for public university graduates in Massachusetts. As a consequence, the
average debt of those who complete a bachelor’s degree from
public institutions has almost reached that of graduates from private
institutions. In 2004 (the earliest year available) the average debt of
public university graduates in Massachusetts was 28 percent lower than
that of graduates from the state’s private colleges and
universities. By 2016 (the most recent year available) the difference
had shrunk to 7 percent.

19)
A greater share of
Massachusetts public university graduates have
debt than private college and university graduates.

Similarly, about equal shares of
graduates from public and private
institutions had student debt upon completing their undergraduate
studies in 2004. By 2016, the share with debt had gone down for
graduates of private institutions (from 60 percent to 54 percent),
while increasing significantly for graduates of public institutions
(from 58 percent to 73 percent).

Massachusetts
Has the Resources
to Invest More in Public Higher
Education

Because states vary in so many different ways—e.g., relative
income levels, student enrollment at different types of public colleges
and universities, cost of living, state
population—it’s hard to compare higher education
spending across all 50 states using one single measure. Therefore, we
end this paper with a few interstate comparisons.

20)
At first, Massachusetts appears to spend more than most states, per
student, on higher education.

When we divide total state
appropriations for public higher education
by enrollment and account for the mix of enrollment across different types
of public colleges and universities (from community colleges to
teaching schools to the flagship research university), Massachusetts
ranks 10th nationwide, and comes in 19 percent above the national
average.

As the next chart shows,
however, the high cost of living in
Massachusetts places real limits on how far each dollar of higher
education spending can go here relative to the rest of the country.

21)
Adjusted for cost of living,
Massachusetts is close to the median
in per student higher education spending.

When we adjust for cost of living,
Massachusetts drops to 20th in state
higher education spending per student—11 percent below the
U.S. average.

22)
Massachusetts is below
average in higher education spending per
capita.

When looking at higher education
spending adjusted for the total state
population, Massachusetts ranks 36th in the country—16
percent below the U.S. average. Our per capita ranking is lower than
our per student ranking in large part because a smaller share of
college students in Massachusetts attend public institutions relative
to private institutions.

23)
As a share of our economy,
Massachusetts spends less on higher
education.

Perhaps most important, we find that
Massachusetts spends less on
public higher education as a share of our aggregate wealth than almost
every other state. Currently, we rank 45th in higher education support
per $1,000 of personal income. We rank low both because we have cut
total higher education spending over the past 17 years and because we
are one of the highest-income states in the country. This wealth is a
resource that affords us more freedom than most other states to make
choices about how we invest in our students and the potential they hold
for the future success of Massachusetts.

TECHNICAL
APPENDIX

Chart 2.
Data in this chart are from the
National Center for Education
Statistics’ Baccalaureate & Beyond survey, which
tracks a cohort of college graduates every eight years. The most recent
cohort is the class of 2008, and the chart shows where those students
were working in 2012.

Chart 3.
These totals also do not capture some
fringe benefits costs
that are funded through separate pension and health care accounts for
all state employees combined. State spending on pensions for higher
education employees hired after 1996 is very low and likely
hasn’t increased much, if at all, over this timeframe. Most
state spending on public employee pensions in recent years is for
employees hired before 1996, since their required payroll deductions
were lower (for more detail, see Demystifying
the State Pension
System). State spending on health care costs for higher
education
employees, by contrast, likely did increase over this timeframe as
health care costs increased nationwide.

Note: Since FY 2001,
several different policies have dictated when
specific campuses must send certain categories of tuition revenue back
to the state. When revenue must be sent to the state, it is not
available for campus operations and has the same effect as reduced
state funding to the campuses. To provide more accurate comparisons of
state support to campuses over time, MassBudget deducts tuition revenue
sent back to the state from the direct appropriations to each campus
type. For details on the policies at a given campus, select that campus
in MassBudget’s
Budget Browser section for Higher Education
and read the NOTES section.

Charts 5 through
8. Tuition and fee data in charts 5 through 8 are
adjusted to net out institutional scholarships. These scholarships are
funded through private donations and surplus tuition and fee revenue in
order to help certain groups of students meet the cost of attending
school. Much of this aid goes to help low-income students, in
particular. Institutional aid has increased somewhat over this
timeframe, especially at UMass, and without this added student support
tuition and fees would likely have increased even more.

Chart 5.
Tuition alone has actually remained relatively level, but
campuses have raised student costs by dramatically increasing mandatory
fees. For FY 2018, for instance, tuition for a full-time resident
student at Salem State University was only $910, but mandatory fees
cost $9,368. Since 2016, UMass has combined tuition and mandatory fees
into one tuition amount. In order to capture the true student cost of
attending any of our different public campuses, we combine tuition and
fees throughout this paper.

Chart 8.
A small portion of state appropriations to the UMass account
in the state budget funds operations at UMass Medical School, but the
vast majority of this state appropriation goes to fund the four
undergraduate campuses, which are the focus of the analysis above.

Charts 20 and 21.
In making adjustments for charts 21 and 22, we follow
the methodology designed by the State Higher Education Executive
Officers Association’s State
Higher Education Finance project
and detailed in
this technical paper. In addition to the cost of living
adjustment, SHEEO recommends adjusting for “enrollment
mix” in order to capture the fact that each level of higher
education has different associated costs, with undergraduate courses
costing less to provide than graduate courses and education at a
community college costing less than that at a research university.
Since state higher education systems have different relative
proportions of students served at each of these levels, adjusting for
enrollment mix can help facilitate more useful cross-state spending
comparisons. In the case of Massachusetts, our enrollment mix is very
close to the national average, so this adjustment makes little
difference in our national ranking, whereas, by contrast, the cost of
living adjustment moves us from near the top to towards the middle.

______________________________

1Among
full-time, year-round workers 25 years and older. MassBudget
analysis of U.S. Census Bureau, 2012-2016 American Community Survey
Public Use Microdata Sample.

2MassBudget
analysis of 2000-2001 and 2015-2016 completion
data by program and award level at Massachusetts community colleges,
from U.S. Department of Education, Integrated Postsecondary Education
Data System.

Massachusetts Budget and Policy Center

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